Sunday, 24 January 2016

Difference between Partnership and Joint Hindu family

1. Formation - The basis of Partnership firm is a contract between persons whereas a Hindu undivided family is created by status i.e., a person becomes its member by virtue of his being born in the particular family.

2. Addition of a new partner or member - When a new partner has to be introduced into a partnership firm, consent of all the partners is needed for the same whereas no such consent is needed for the addition of a member into the joint Hindu family. A person becomes the member of the family on being born in that family.

3. Mutual agency - There is mutual agency between the partners of a particular firm, and the act done by any of the partners binds the firm whereas there is no such mutual agency between the members of a joint Hindu family. The Karta of the joint Hindu  family  has all  the powers  to act  on the  behalf  of the family  and he is the only  person  who can  represent  the family.

4. Liability - The liability  of a partner  is not  only  joint  liability or limited to his  share  in the partnership  business, the liability  is several  liability   also. Such liability is unlimited and even a partner’s personal property can be attached for the partnership debts. On the other hand, the liability of the coparceners, on the other hand, is limited only to the extent of their shares in the family business.

5. Minor - A minor cannot become a partner in a firm, he can be admitted only for the benefits whereas a person becomes a coparcener right from his birth.

6. Limit on number of persons - There is a limit on the number of partners in a firm, i.e., 10 in banking business and 20 in any other business whereas there is no limit on the number of coparceners in joint Hindu family.

7. Dissolution - In the absence of any agreement to the contrary, partnership is dissolved on the death of any partner whereas joint Hindu family continues to operate even after the death of a coparcener.


8. Governing Law - A partnership is governed by the provisions of the Indian Partnership Act, 1932 whereas a joint Hindu family business is governed by Hindu law.

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